5 Ways to Balance the Cash Flow See-Saw
In business, we all know that “Cash is King”.
Have you heard it said, “Revenue is vanity, profit is sanity”?
Even then, while your financial accounts might show increasing profits on paper, unless we have cash in our bank, running a business can be a worry.
Poor cash flow can hold back our business growth, for example making us reluctant to invest in the things that would help our business growth, such as marketing, recruiting more people, purchasing new machinery, or employing a coach.
Our goal is to create a business that accumulates cash as it grows. Not only does this make life more enjoyable (through more peace of mind), but it also increases the value of your business should you reach a point when you wish to sell it.
Accumulating cash is not always a case of winning new customers.
How we get paid by our existing customers is just one of many strategies that can make a huge difference to our cash flow situation.
Creating a positive cash flow cycle
Here are 5 easy ways you might be able to create a more positive cash flow cycle in your business.
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1.???? If you invoice your customers in installments, consider charging a greater percentage of the overall price upfront.
2.???? Find ways to evolve your business into a subscription or membership model in which you invoice customers before they receive the benefits of their membership or subscription.
3.???? If you sell a service, consider how you could do more to “productise” your offer and thereby make it easier to charge upfront.
4.???? Reduce the amount of stock you pay for in advance of needing it.
5.???? Negotiate with suppliers to lengthen payment terms – where appropriate. (Your supplier may be using these same strategies and so might resist this.)
If you need some help balancing your cash flow, or would just like a chat about business generally, feel free to get in touch.
For more help and growth tips, book your place on my free webinar, ‘How to Grow Your Business in 6 Months While Sustaining Work/Life Balance ’.
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Organizational Alchemist & Catalyst for Operational Excellence: Turning Team Dynamics into Pure Gold | Sales & Business Trainer @ UEC Business Consulting
10 个月Cash is indeed crucial for business! Don't forget to focus on your existing customers and explore different strategies to improve cash flow.
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10 个月I am up in Edinburgh tomorrow otherwise would definately jump on. Always good to get moire ideas around this.
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10 个月Some great advice there Ros and food for thought.